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FTA benefits debated at nat’l forum

Phnom Penh Post - 20 October 2022

FTA benefits debated at nat’l forum

More than 50 government, civil society organizations (CSOs), unions and private sector officials met at an October 20 forum to discuss the benefits and challenges in the agricultural sector related to free trade agreements (FTA).

The Cambodia-China Free Trade Agreement (CCFTA) and the Regional Comprehensive Economic Partnership (RCEP) came into force on January 1, 2021, with the government claiming that the two agreements would be a driving force in growth of trade, services and investment, and would provide additional markets for hundreds of new items for export from Cambodia.

While government officials have said that FTAs are important to attract investors to the country, some civil society organisations voiced concerns at the forum that the deals did not appear to be of any benefit to smallholder farmers.

The forum is aimed promoting constructive dialogue among all stakeholders to ensure that the agreements’ contributions to the Cambodian economy are equitably maximised, CSOs said.

The Affiliated Network for Social Accountability Cambodia said the dialogue was also a forum for researchers and FTA beneficiaries to provide inputs, making the bilateral agreements more beneficial to the Kingdom.

“The Civil Society Policy Dialogue on the Free Trade Agreement Phase II is a project run by us, and funded by the German BMZ,” he said, referring to Germany’s Federal Ministry of Economic Cooperation and Development.

“We aim to implement a number of key activities including policy briefing and awareness training of the FTAs to target groups, including unions, CSOs, youth and the general public, especially farmers, in early September,” it said.

This dialogue is part of a project that will learn as well as share knowledge related to the freedom and fairness of trade agreements, it said.

Hok Sothea, deputy director of the Cambodian Ministry of Commerce’s Asia-Pacific department, said FTAs are agreements that are mutually beneficial, and that Cambodia establishes these deals with other countries to attract investors at a time when the Kingdom is not yet able to produce certain goods on its own.

“Most people asked if we have a chance to profit from these agreements. Experts and the ministry have made it clear that without profit, Cambodia would not have signed the FTAs. If we consider that Cambodia only has just 16 million people, why would other countries want to invest in us?” he said.

“Would they invest here if they were only able to sell within Cambodia? On the contrary, now that we have signed these FTAs, we have opened up large markets. Products which are made here can be exported to many of our partner countries tax-free, and this will attract investors,” he added.

Pen Sony, director of the Federation of Farmer Association Promoting Family Agricultural Enterprises in Cambodia (FAEC), said that although the FTAs may be beneficial to Cambodia, his organisation’s practical research had shown that they were unlikely to benefit smallholder farmers.

Citing these findings, he expects the government to study such agreements more closely to ensure that farmers – who are more exposed to market forces like scarcity and oversupply – would share in their benefits.

“If we look at this system, it makes it very difficult for our farmers to import their products into new markets. I would like to ask the commerce ministry to consider the opinions of farmers before they reach any FTAs with other countries,” he said.

However, Sothea pointed out that although the FTAs do not currently provide large benefits to farmers engaged in small-scale agriculture, it has increased Cambodia’s market share in many countries.

 source: Phnom Penh Post